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| (Mark One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
| for the quarterly period ended March 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
| [ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| for the transition period from                                                       to                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
| Commission File Number 000-50266                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |

| New Mexico                                                     |   | 85-0242376                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation of organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| 1200 Trinity Drive, Los Alamos, New Mexico 87544               |
| (Address of principal executive offices)                       |
|                                                           |   |                                 |
| (505) 662-5171                                            |
| (Registrant’s telephone number, including Area Code)     |

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| Large Accelerated Filer  [ ] | Accelerated Filer  [ X ] |
|----------------------------------------|------------------------------------|
| Non-Accelerated Filer  [ ]   | Smaller Reporting Company[ ]       |

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TRINITY CAPITAL CORPORATION AND SUBSIDIARIES

| PART I. FINANCIAL INFORMATION |
|-------------------------------|
|                          |   |
| Item 1.                       | Financial Statements (unaudited) |
|                          |   |
| Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|                          |   |
| Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk |
|                          |   |
| Item 4.                       | Controls and Procedures |
|                          |   |
| PART II. OTHER INFORMATION    |
|                          |   |
| Item 1.                       | Legal Proceedings |
|                          |   |
| Item 1A.                      | Risk Factors |
|                          |   |
| Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds |
|                          |   |
| Item 3.                       | Defaults Upon Senior Securities |
|                          |   |
| Item 4.                       | [Removed and Reserved] |
|                          |   |
| Item 5.                       | Other Information |
|                          |   |
| Item 6.                       | Exhibits |
|                          |   |
|                          | SIGNATURES |
|                          |   |
|                          | CERTIFICATIONS |

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Table of contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

|                                                                                                                                            |   | March 31, 2011 |      |   | December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                                                            |   | (Unaudited)    |      |   |              |   |
| ASSETS                                                                                                                                          |   |           |      |   |              |   |
| Cash and due from banks                                                                                                                         |   | $              | 18,305    |   |              | $      | 16,765 |   |
| Interest-bearing deposits with banks                                                                                                            |   |           | 101,062   |   |              |   | 89,316 |   |
| Federal funds sold and securities purchased under resell agreements                                                                             |   |           | 393       |   |              |   | 110 |   |
| Cash and cash equivalents                                                                                                                       |   |           | 119,760   |   |              |   | 106,191 |   |
| Investment securities available for sale                                                                                                        |   |           | 134,728   |   |              |   | 162,591 |   |
| Investment securities held to maturity, at amortized cost (fair value of $10,786 at March 31, 2011 and $10,951 at  December 31, 2010) |   |           | 11,026    |   |              |   | 11,107 |   |
| Other investments                                                                                                                               |   |           | 9,218     |   |              |   | 9,335 |   |
| Loans held for sale                                                                                                                             |   |           | 5,174     |   |              |   | 25,080 |   |
| Loans (net of allowance for loan losses of $28,384 at March 31, 2011 and $28,722 at December 31, 2010)                                          |   |           | 1,157,520 |   |              |   | 1,161,216 |   |
| Premises and equipment, net                                                                                                                     |   |           | 29,734    |   |              |   | 30,264 |   |
| Leased property under capital leases, net                                                                                                       |   |           | 2,211     |   |              |   | 2,211 |   |
| Accrued interest receivable                                                                                                                     |   |           | 6,736     |   |              |   | 6,736 |   |
| Mortgage servicing rights, net                                                                                                                  |   |           | 8,155     |   |              |   | 7,960 |   |
| Other intangible assets                                                                                                                         |   |           | 383       |   |              |   | 546 |   |
| Other real estate owned                                                                                                                         |   |           | 21,218    |   |              |   | 21,860 |   |
| Prepaid expenses                                                                                                                                |   |           | 5,158     |   |              |   | 6,076 |   |
| Net deferred tax assets                                                                                                                         |   |           | 5,737     |   |              |   | 5,587 |   |
| Other assets                                                                                                                                    |   |           | 6,178     |   |              |   | 8,682 |   |
| Total assets                                                                                                                                    |   | $              | 1,522,936 |   |              | $      | 1,565,442 |   |

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Table of contents

|                                                                                                                           |   | March 31, 2011 |      |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                                           |   | (Unaudited)    |      |   |              |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                           |   |           |      |   |              |   |
| Liabilities                                                                                                                    |   |           |      |   |              |   |
| Deposits:                                                                                                                      |   |           |      |   |              |   |
| Noninterest-bearing                                                                                                            |   | $              | 114,053   |   |              | $      | 109,891 |   |
| Interest-bearing                                                                                                               |   |           | 1,202,399 |   |              |   | 1,248,454 |   |
| Total deposits                                                                                                                 |   |           | 1,316,452 |   |              |   | 1,358,345 |   |
| Short-term borrowings                                                                                                          |   |           | 10,000    |   |              |   | 1,152 |   |
| Long-term borrowings                                                                                                           |   |           | 22,300    |   |              |   | 32,300 |   |
| Long-term capital lease obligations                                                                                            |   |           | 2,211     |   |              |   | 2,211 |   |
| Junior subordinated debt owed to unconsolidated trusts                                                                         |   |           | 37,116    |   |              |   | 37,116 |   |
| Accrued interest payable                                                                                                       |   |           | 2,696     |   |              |   | 4,873 |   |
| Other liabilities                                                                                                              |   |           | 7,130     |   |              |   | 5,990 |   |
| Total liabilities                                                                                                              |   |           | 1,397,905 |   |              |   | 1,441,987 |   |
|                                                                                                                           |   |           |      |   |              |   |   |   |
| Stock owned by Employee Stock Ownership Plan (ESOP) participants; 628,914 shares, at fair value                                |   | $              | 5,817     |   |              | $      | 6,132 |   |
| Commitments and contingencies (Note 12)                                                                                        |   |           |      |   |              |   |   |   |
| Stockholders’ equity                                                                                                     |   |           |      |   |              |   |   |   |
| Preferred stock, no par, authorized 1,000,000 shares                                                                           |   |           |      |   |              |   |   |   |
| Series A, 5% cumulative perpetual, 35,539 shares issued and outstanding, $1,000 liquidation value per share, at amortized cost |   | $              | 33,860    |   |              | $      | 33,808 |   |
| Series B, 9% cumulative perpetual, 1,777 shares issued and outstanding, $1,000 liquidation value per share, at amortized cost  |   |           | 2,036     |   |              |   | 2,044 |   |
| Common stock, no par, authorized 20,000,000 shares; issued 6,856,800 shares, shares outstanding 6,449,726                      |   |           | 6,836     |   |              |   | 6,836 |   |
| Additional paid-in capital                                                                                                     |   |           | 1,918     |   |              |   | 1,899 |   |
| Retained earnings                                                                                                              |   |           | 84,878    |   |              |   | 83,018 |   |
| Accumulated other comprehensive gain                                                                                           |   |           | 660       |   |              |   | 692 |   |
| Total stockholders' equity before treasury stock                                                                               |   |           | 130,188   |   |              |   | 128,297 |   |
| Treasury stock, at cost, 407,074 shares at March 31, 2011 and December 31, 2010                                                |   |           | (10,974   | )      |              |   | (10,974 | ) |
| Total stockholders' equity                                                                                                     |   |           | 119,214   |   |              |   | 117,323 |   |
| Total liabilities and stockholders' equity                                                                                     |   | $              | 1,522,936 |   |              | $      | 1,565,442 |   |

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Table of contents

|                                                   |   | Three Months Ended March 31, |   |
|--------------------------------------------------------|--------|------------------------------|--------|
|                                                   |   | 2011                         |   |   | 2010 |   |
| Interest income:                                       |   |                         |   |   |   |   |
| Loans, including fees                                  |   | $                            | 15,797 |   |   | $ | 17,272 |   |
| Investment securities:                                 |   |                         |   |   |   |   |   |   |
| Taxable                                                |   |                         | 463    |   |   |   | 633 |   |
| Nontaxable                                             |   |                         | 281    |   |   |   | 298 |   |
| Other interest-bearing deposits                        |   |                         | 54     |   |   |   | 105 |   |
| Investment in unconsolidated trusts                    |   |                         | 22     |   |   |   | 20 |   |
| Total interest income                                  |   |                         | 16,617 |   |   |   | 18,328 |   |
| Interest expense:                                      |   |                         |   |   |   |   |   |   |
| Deposits                                               |   |                         | 2,353  |   |   |   | 3,963 |   |
| Short-term borrowings                                  |   |                         | 40     |   |   |   | 216 |   |
| Long-term borrowings                                   |   |                         | 214    |   |   |   | 128 |   |
| Long-term capital lease obligations                    |   |                         | 67     |   |   |   | 67 |   |
| Junior subordinated debt owed to unconsolidated trusts |   |                         | 723    |   |   |   | 683 |   |
| Total interest expense                                 |   |                         | 3,397  |   |   |   | 5,057 |   |
| Net interest income                                    |   |                         | 13,220 |   |   |   | 13,271 |   |
| Provision for loan losses                              |   |                         | 1,450  |   |   |   | 4,257 |   |
| Net interest income after provision for loan losses    |   |                         | 11,770 |   |   |   | 9,014 |   |
| Other income:                                          |   |                         |   |   |   |   |   |   |
| Mortgage loan servicing fees                           |   |                         | 667    |   |   |   | 646 |   |
| Trust fees                                             |   |                         | 460    |   |   |   | 355 |   |
| Loan and other fees                                    |   |                         | 752    |   |   |   | 666 |   |
| Service charges on deposits                            |   |                         | 383    |   |   |   | 408 |   |
| Net gain on sale of loans                              |   |                         | 1,280  |   |   |   | 720 |   |
| Net gain on sale of securities                         |   |                         | 171    |   |   |   | 47 |   |
| Title insurance premiums                               |   |                         | 164    |   |   |   | 188 |   |
| Other operating income                                 |   |                         | 107    |   |   |   | 26 |   |
| Total other income                                     |   |                         | 3,984  |   |   |   | 3,056 |   |

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Table of contents

|                                                    |   | Three Months Ended March 31, |   |
|---------------------------------------------------------|--------|------------------------------|--------|
|                                                    |   | 2011                         |   |   | 2010 |   |
| Other expenses:                                         |   |                         |   |   |   |   |
| Salaries and employee benefits                          |   | $                            | 5,501  |   |   | $ | 5,078 |   |
| Occupancy                                               |   |                         | 934    |   |   |   | 977 |   |
| Data processing                                         |   |                         | 788    |   |   |   | 724 |   |
| Marketing                                               |   |                         | 455    |   |   |   | 356 |   |
| Amortization and valuation of mortgage servicing rights |   |                         | 303    |   |   |   | 309 |   |
| Amortization and valuation of other intangible assets   |   |                         | 163    |   |   |   | 125 |   |
| Supplies                                                |   |                         | 361    |   |   |   | 91 |   |
| Loss on sale of other real estate owned                 |   |                         | 658    |   |   |   | 432 |   |
| Postage                                                 |   |                         | 177    |   |   |   | 161 |   |
| Bankcard and ATM network fees                           |   |                         | 343    |   |   |   | 163 |   |
| Legal, professional and accounting fees                 |   |                         | 725    |   |   |   | 753 |   |
| FDIC insurance premiums                                 |   |                         | 761    |   |   |   | 898 |   |
| Collection expenses                                     |   |                         | 434    |   |   |   | 380 |   |
| Other                                                   |   |                         | 1,027  |   |   |   | 538 |   |
| Total other expense                                     |   |                         | 12,630 |   |   |   | 10,985 |   |
| Income before provision for income taxes                |   |                         | 3,124  |   |   |   | 1,085 |   |
| Provision for income taxes                              |   |                         | 1,038  |   |   |   | 649 |   |
| Net income                                              |   | $                            | 2,086  |   |   | $ | 436 |   |
| Dividends and discount accretion on preferred shares    |   |                         | 542    |   |   |   | 529 |   |
| Net income (loss) available to common shareholders      |   | $                            | 1,544  |   |   | $ | (93 | ) |
| Basic earnings (loss) per common share                  |   | $                            | 0.24   |   |   | $ | (0.01 | ) |
| Diluted earnings (loss) per common share                |   | $                            | 0.24   |   |   | $ | (0.01 | ) |

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Table of contents

|                                                                                                 |   | Three Months Ended March 31, |    |
|------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                                 |   | 2011                         |    |   | 2010 |   |
| Cash Flows From Operating Activities                                                                 |   |                         |    |   |
| Net income                                                                                           |   | $                            | 2,086   |   |   | $ | 436 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                    |   |
| Depreciation and amortization                                                                        |   |                         | 759     |   |   |   | 778 |   |
| Net amortization of:                                                                                 |   |                         |    |   |   |   |   |   |
| Mortgage servicing rights                                                                            |   |                         | 383     |   |   |   | 502 |   |
| Other intangible assets                                                                              |   |                         | 163     |   |   |   | 125 |   |
| Premium and discounts on investment securities, net                                                  |   |                         | 526     |   |   |   | 118 |   |
| Junior subordinated debt owed to unconsolidated trusts issuance costs                                |   |                         | 3       |   |   |   | 3 |   |
| Provision for loan losses                                                                            |   |                         | 1,450   |   |   |   | 4,257 |   |
| Change in mortgage servicing rights valuation allowance                                              |   |                         | (80     | ) |   |   | (193 | ) |
| Loss on disposal of premises and equipment                                                           |   |                         | -       |   |   |   | 9 |   |
| Net gain on sale of investment securities                                                            |   |                         | (171    | ) |   |   | (47 | ) |
| Federal Home Loan Bank (FHLB) stock dividends received                                               |   |                         | (3      | ) |   |   | (3 | ) |
| Loss on venture capital investments                                                                  |   |                         | 291     |   |   |   | 90 |   |
| Net gain on sale of loans                                                                            |   |                         | (1,280  | ) |   |   | (720 | ) |
| Loss on disposal of other real estate owned                                                          |   |                         | 136     |   |   |   | 103 |   |
| Write-down of value of other real estate owned                                                       |   |                         | 526     |   |   |   | 339 |   |
| Decrease in other assets                                                                             |   |                         | 3,288   |   |   |   | 449 |   |
| Decrease in other liabilities                                                                        |   |                         | (1,534  | ) |   |   | (585 | ) |
| Stock options and stock appreciation rights expenses                                                 |   |                         | 19      |   |   |   | 36 |   |
| Net cash provided by operating activities before originations and gross sales of loans held for sale |   |                         | 6,562   |   |   |   | 5,697 |   |
| Gross sales of loans held for sale                                                                   |   |                         | 51,190  |   |   |   | 30,695 |   |
| Origination of loans held for sale                                                                   |   |                         | (30,502 | ) |   |   | (28,930 | ) |
| Net cash provided by operating activities                                                            |   |                         | 27,250  |   |   |   | 7,462 |   |

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Table of contents

|                                                                               |   | Three Months Ended March 31, |    |
|------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                               |   | 2011                         |    |   | 2010 |   |
| Cash Flows From Investing Activities                                               |   |                         |    |   |
| Proceeds from maturities and paydowns of investment securities, available for sale |   | $                            | 28,718  |   |   | $ | 19,505 |   |
| Proceeds from maturities and paydowns of investment securities, held to maturity   |   |                         | 81      |   |   |   | 83 |   |
| Proceeds from maturities and paydowns of investment securities, other              |   |                         | -       |   |   |   | 171 |   |
| Proceeds from sale of investment securities, available for sale                    |   |                         | 4,432   |   |   |   | 3,422 |   |
| Purchase of investment securities, available for sale                              |   |                         | (5,693  | ) |   |   | (10,867 | ) |
| Purchase of investment securities, other                                           |   |                         | (171    | ) |   |   | (26 | ) |
| Proceeds from sale of other real estate owned                                      |   |                         | 1,176   |   |   |   | 1,698 |   |
| Net decrease in loans                                                              |   |                         | 1,050   |   |   |   | 8,912 |   |
| Purchases of premises and equipment                                                |   |                         | (229    | ) |   |   | (239 | ) |
| Net cash provided by investing activities                                          |   |                         | 29,364  |   |   |   | 22,659 |   |
| Cash Flows From Financing Activities                                               |   |                         |    |   |   |
| Net (decrease) in demand deposits, NOW accounts and savings accounts               |   |                         | (4,908  | ) |   |   | (78,456 | ) |
| Net (decrease) increase in time deposits                                           |   |                         | (36,985 | ) |   |   | 7,464 |   |
| Proceeds from issuances of borrowings                                              |   |                         | -       |   |   |   | 20,000 |   |
| Repayment of borrowings                                                            |   |                         | (1,152  | ) |   |   | (20,010 | ) |
| Common shares dividend payments                                                    |   |                         | -       |   |   |   | (1,739 | ) |
| Preferred shares dividend payments                                                 |   |                         | -       |   |   |   | (488 | ) |
| Net cash (used in) financing activities                                            |   |                         | (43,045 | ) |   |   | (73,229 | ) |
| Net increase (decrease) in cash and cash equivalents                               |   |                         | 13,569  |   |   |   | (43,108 | ) |
| Cash and cash equivalents:                                                         |   |                         |    |   |   |   |   |   |
| Beginning of period                                                                |   |                         | 106,191 |   |   |   | 207,495 |   |
| End of period                                                                      |   | $                            | 119,760 |   |   | $ | 164,387 |   |
|                                                                               |   |                         |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information                                  |   |
| Cash payments for:                                                                 |   |                         |    |   |   |   |   |   |
| Interest                                                                           |   | $                            | 5,574   |   |   | $ | 5,581 |   |
| Income taxes                                                                       |   | $                            | 238     |   |   | $ | 72 |   |
| Non-cash investing and financing activities:                                       |   |
| Transfers from loans to other real estate owned                                    |   | $                            | 1,196   |   |   | $ | 5,415 |   |
| Dividends declared, not yet paid                                                   |   | $                            | 1,720   |   |   | $ | 240 |   |
| Change in unrealized gain on investment securities, net of taxes                   |   | $                            | (32     | ) |   | $ | (274 | ) |

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Table of contents

|                                                    |   | Three Months Ended March 31, |   |
|---------------------------------------------------------|--------|------------------------------|--------|
|                                                    |   | 2011                         |   |   | 2010 |   |
|                                                    |   | (Unaudited; in thousands)    |   |
| Net income                                              |   | $                            | 2,086  |   |   | $ | 436 |   |
| Securities available for sale:                          |   |                         |   |   |   |   |   |   |
| Net unrealized gains (losses) arising during the period |   |                         | 122    |   |   |   | (395 | ) |
| Related income tax (expense) benefit                    |   |                         | (40    | ) |   |   | 140 |   |
| Net securities gains reclassified into earnings         |   |                         | (171   | ) |   |   | (47 | ) |
| Related income tax benefit                              |   |                         | 57     |   |   |   | 28 |   |
| Net effect on other comprehensive income for the period |   |                         | (32    | ) |   |   | (274 | ) |
| Comprehensive income                                    |   | $                            | 2,054  |   |   | $ | 162 |   |

|                                                                 |   | Three Months Ended March 31,                    |      |
|----------------------------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                                                 |   | 2011                                            |      |   | 2010 |   |
|                                                                 |   | (In thousands, except share and per share data) |      |
|                                                                 |   |                                            |      |   |   |   |
| Net income                                                           |   | $                                               | 2,086     |   |   | $ | 436 |   |
| Dividends and discount accretion on preferred shares                 |   |                                            | 542       |   |   |   | 529 |   |
| Net income (loss) available to common shareholders                   |   | $                                               | 1,544     |   |   | $ | (93 | ) |
| Weighted average common shares issued                                |   |                                            | 6,856,800 |   |   |   | 6,856,800 |   |
| LESS: Weighted average treasury stock shares                         |   |                                            | (407,074  | ) |   |   | (416,016 | ) |
| Weighted average common shares outstanding, net                      |   |                                            | 6,449,726 |   |   |   | 6,440,784 |   |
| Basic earnings per common share                                      |   | $                                               | 0.24      |   |   | $ | (0.01 | ) |
| Weighted average common shares outstanding including dilutive shares |   |                                            | 6,449,726 |   |   |   | 6,440,784 |   |
| Diluted earnings per common share                                    |   | $                                               | 0.24      |   |   | $ | (0.01 | ) |

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| AVAILABLE FOR SALE                     |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|----------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                                   |   | (In thousands) |    |
| March 31, 2011                         |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U.S. Government sponsored agencies     |   | $              | 32,346  |   |                   | $      | 148    |                    |   | $      | -          |   |   | $ | 32,494 |   |
| States and political subdivisions      |   |           | 22,454  |   |                   |   | 581    |                    |   |   | -          |   |   |   | 23,035 |   |
| Residential mortgage-backed securities |   |           | 78,892  |   |                   |   | 1,035  |                    |   |   | (728       | )      |   |   | 79,199 |   |
| Totals                                 |   | $              | 133,692 |   |                   | $      | 1,764  |                    |   | $      | (728       | )      |   | $ | 134,728 |   |
|                                   |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| December 31, 2010                      |   |           |    |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| U.S. Government sponsored agencies     |   | $              | 42,551  |   |                   | $      | 184    |                    |   | $      | -          |   |   | $ | 42,735 |   |
| States and political subdivisions      |   |           | 20,263  |   |                   |   | 402    |                    |   |   | (81        | )      |   |   | 20,584 |   |
| Residential mortgage-backed securities |   |           | 98,692  |   |                   |   | 1,194  |                    |   |   | (614       | )      |   |   | 99,272 |   |
| Totals                                 |   | $              | 161,506 |   |                   | $      | 1,780  |                    |   | $      | (695       | )      |   | $ | 162,591 |   |

| HELD TO MATURITY                  |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|-----------------------------------|--------|----------------|--------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                              |   | (In thousands) |   |
| March 31, 2011                    |   |           |   |   |                   |   |   |                    |   |   |       |   |
| States and political subdivisions |   | $              | 11,026 |   |                   | $      | 13     |                    |   | $      | (253       | )      |   | $ | 10,786 |   |
| Totals                            |   | $              | 11,026 |   |                   | $      | 13     |                    |   | $      | (253       | )      |   | $ | 10,786 |   |
|                              |   |           |   |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| December 31, 2010                 |   |           |   |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| States and political subdivisions |   | $              | 11,107 |   |                   | $      | 91     |                    |   | $      | (247       | )      |   | $ | 10,951 |   |
| Totals                            |   | $              | 11,107 |   |                   | $      | 91     |                    |   | $      | (247       | )      |   | $ | 10,951 |   |

|                  |   | Three Months Ended March 31, |   |
|-----------------------|--------|------------------------------|--------|
|                  |   | 2011                         |   | 2010 |   |
|                  |   | (In thousands)               |   |
| Gross realized gains  |   | $                            | 174    |   |   | $ | 47 |   |
| Gross realized losses |   |                         | (3     | ) |   |   | - |   |
| Net gains             |   | $                            | 171    |   |   | $ | 47 |   |

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|                                   |   | Less than 12 Months |   |   | 12 Months or Longer |    |   | Total      |   |
|----------------------------------------|--------|---------------------|--------|--------|---------------------|---------|--------|------------|--------|
| AVAILABLE FOR SALE                     |   | Fair Value          |   |   | Unrealized Losses   |    |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                   |   | (In thousands)      |   |
| March 31, 2011                         |   |                |   |   |                |    |   |       |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities |   | $              | 43,214 |   |                | $  | (728   | )          |   | $  | - |   |   | $  | - |   |   | $  | 43,214 |   |   | $  | (728 | ) |
| Totals                                 |   | $                   | 43,214 |   |                | $       | (728   | )          |   | $ | - |   |   | $ | - |   |   | $ | 43,214 |   |   | $ | (728 | ) |
|                                   |   |                |   |   |                |    |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                      |   |                |   |   |                |    |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| States and political subdivisions      |   | $              | 3,682  |   |                | $  | (81    | )          |   | $  | - |   |   |   | - |   |   | $  | 3,682 |   |   | $  | (81 | ) |
| Residential mortgage-backed securities |   |                | 38,796 |   |                |    | (614   | )          |   |   | - |   |   |   | - |   |   |   | 38,796 |   |   |   | (614 | ) |
| Totals                                 |   | $                   | 42,478 |   |                | $       | (695   | )          |   | $ | - |   |   | $ | - |   |   | $ | 42,478 |   |   | $ | (695 | ) |

|                              |   | Less than 12 Months |   |   | 12 Months or Longer |   |   | Total      |   |
|-----------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|------------|--------|
| HELD TO MATURITY                  |   | Fair Value          |   |   | Unrealized Losses   |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                              |   | (In thousands)      |   |
| March 31, 2011                    |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
| States and political subdivisions |   | $                   | -      |   |                | $      | -      |       |   | $ | 1,298 |   |   | $ | (253 | ) |   | $ | 1,298 |   |   | $ | (253 | ) |
| Totals                            |   | $                   | -      |   |                | $      | -      |       |   | $ | 1,298 |   |   | $ | (253 | ) |   | $ | 1,298 |   |   | $ | (253 | ) |
|                              |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                 |   |                |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| States and political subdivisions |   | $                   | -      |   |                | $      | -      |       |   | $ | 1,089 |   |   | $ | (247 | ) |   | $ | 1,089 |   |   | $ | (247 | ) |
| Totals                            |   | $                   | -      |   |                | $      | -      |       |   | $ | 1,089 |   |   | $ | (247 | ) |   | $ | 1,089 |   |   | $ | (247 | ) |

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Table of contents

|                                       |   | Available for Sale |    |   | Held to Maturity |   |    | Other Investments |   |
|--------------------------------------------|--------|--------------------|---------|--------|------------------|--------|---------|-------------------|--------|
|                                       |   | Amortized Cost     |    |   | Fair Value       |   |    | Amortized Cost    |   |   | Fair Value |   |   | Amortized Cost |   |   | Fair Value |   |
|                                       |   | (In thousands)     |    |
| One year or less                           |   | $                  | 19,526  |   |             | $      | 19,601  |              |   | $ | - |   |   | $ | - |   |   | $ | 150 |   |   | $ | 150 |   |
| One to five years                          |   |               | 29,911  |   |             |   | 30,253  |              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Five to ten years                          |   |               | 31,061  |   |             |   | 31,347  |              |   |   | 1,299 |   |   |   | 1,045 |   |   |   | - |   |   |   | - |   |
| Over ten years                             |   |               | 53,194  |   |             |   | 53,527  |              |   |   | 9,727 |   |   |   | 9,741 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Equity investments with no stated maturity |   |               | -       |   |             |   | -       |              |   |   | - |   |   |   | - |   |   |   | 7,952 |   |   |   | 7,952 |   |
|                                       |   | $                  | 133,692 |   |             | $      | 134,728 |              |   | $ | 11,026 |   |   | $ | 10,786 |   |   | $ | 9,218 |   |   | $ | 9,218 |   |

|                      |   | March 31,      |      |   | December 31, |   |
|---------------------------|--------|----------------|-----------|--------|--------------|--------|
|                      |   | 2011           |      |   | 2010         |   |
|                      |   | (In thousands) |      |
| Commercial                |   | $              | 145,559   |   |         | $      | 149,987 |   |
| Commercial real estate    |   |           | 423,820   |   |         |   | 425,172 |   |
| Residential real estate   |   |           | 401,036   |   |         |   | 400,713 |   |
| Construction real estate  |   |           | 168,835   |   |         |   | 164,721 |   |
| Installment and other     |   |           | 48,922    |   |         |   | 51,632 |   |
| Total loans               |   |           | 1,188,172 |   |         |   | 1,192,225 |   |
| Unearned income           |   |           | (2,268    | )      |         |   | (2,287 | ) |
| Gross loans               |   |           | 1,185,904 |   |         |   | 1,189,938 |   |
| Allowance for loan losses |   |           | (28,384   | )      |         |   | (28,722 | ) |
| Net loans                 |   | $              | 1,157,520 |   |         | $      | 1,161,216 |   |

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|                              |   | Current        |      | 30-59 Days Past Due |   | 60-89 Days Past Due |   | Loans past due 90 days or more |   | Total Past Due |   | Total  |   |
|-----------------------------------|--------|----------------|-----------|---------------------|--------|---------------------|--------|--------------------------------|--------|----------------|--------|--------|--------|
| March 31, 2011:                   |   | (In thousands) |      |
| Commercial                        |   | $              | 142,420   |                |   | $                   | 456    |                           |   | $              | -      |   |   | $ | 2,683 |   |   | $ | 3,139 |   |   | $ | 145,559 |   |
| Commercial real estate            |   |           | 404,946   |                |   |                | -      |                           |   |           | -      |   |   |   | 18,874 |   |   |   | 18,874 |   |   |   | 423,820 |   |
| Residential real estate           |   |           | 386,190   |                |   |                | 488    |                           |   |           | 358    |   |   |   | 14,000 |   |   |   | 14,846 |   |   |   | 401,036 |   |
| Construction real estate          |   |           | 144,625   |                |   |                | 950    |                           |   |           | -      |   |   |   | 23,260 |   |   |   | 24,210 |   |   |   | 168,835 |   |
| Installment and other             |   |           | 45,708    |                |   |                | 69     |                           |   |           | 295    |   |   |   | 2,850 |   |   |   | 3,214 |   |   |   | 48,922 |   |
| Total loans                       |   | $              | 1,123,889 |                |   | $                   | 1,963  |                           |   | $              | 653    |   |   | $ | 61,667 |   |   | $ | 64,283 |   |   | $ | 1,188,172 |   |
|                              |   |           |      |                |   |                |   |                           |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming loan classification |   | $              | -         |                |   | $                   | -      |                           |   | $              | -      |   |   | $ | 61,667 |   |   | $ | 61,667 |   |   | $ | 61,667 |   |
|                              |   |           |      |                |   |                |   |                           |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:                |   |
| Commercial                        |   | $              | 146,875   |                |   | $                   | 759    |                           |   | $              | 83     |   |   | $ | 2,270 |   |   | $ | 3,112 |   |   | $ | 149,987 |   |
| Commercial real estate            |   |           | 405,393   |                |   |                | 808    |                           |   |           | -      |   |   |   | 18,971 |   |   |   | 19,779 |   |   |   | 425,172 |   |
| Residential real estate           |   |           | 388,898   |                |   |                | 2,422  |                           |   |           | 1,038  |   |   |   | 8,355 |   |   |   | 11,815 |   |   |   | 400,713 |   |
| Construction real estate          |   |           | 141,126   |                |   |                | 717    |                           |   |           | 9,628  |   |   |   | 13,250 |   |   |   | 23,595 |   |   |   | 164,721 |   |
| Installment and other             |   |           | 47,974    |                |   |                | 156    |                           |   |           | 38     |   |   |   | 3,464 |   |   |   | 3,658 |   |   |   | 51,632 |   |
| Total loans                       |   | $              | 1,130,266 |                |   | $                   | 4,862  |                           |   | $              | 10,787 |   |   | $ | 46,310 |   |   | $ | 61,959 |   |   | $ | 1,192,225 |   |
|                              |   |           |      |                |   |                |   |                           |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming loan classification |   | $              | 1,772     |                |   | $                   | 600    |                           |   | $              | 1,286  |   |   | $ | 46,130 |   |   | $ | 48,196 |   |   | $ | 49,968 |   |

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|                     |   | March 31, 2011 |   |   | December 31, 2010                                          |   |
|--------------------------|--------|----------------|--------|--------|------------------------------------------------------------|--------|
|                     |   | Nonaccrual     |   |   | Loans past due 90 days or more and still accruing interest |   |   | Nonaccrual |   |   | Loans past due 90 days or more and still accruing interest |   |
|                     |   | (In thousands) |   |
| Commercial               |   | $              | 2,683  |   |                                                       | $      | - |   |   | $ | 2,598 |   |   | $ | - |   |
| Commercial real estate   |   |           | 18,874 |   |                                                       |   | - |   |   |   | 19,419 |   |   |   | - |   |
| Residential real estate  |   |           | 14,000 |   |                                                       |   | - |   |   |   | 10,951 |   |   |   | - |   |
| Construction real estate |   |           | 23,260 |   |                                                       |   | - |   |   |   | 13,908 |   |   |   | - |   |
| Installment and other    |   |           | 2,850  |   |                                                       |   | - |   |   |   | 3,092 |   |   |   | - |   |
| Total                    |   | $              | 61,667 |   |                                                       | $      | - |   |   | $ | 49,968 |   |   | $ | - |   |

|                     |   | Pass           |      | Special Mention |   | Substandard |   | Doubtful |   | Total  |   |
|--------------------------|--------|----------------|-----------|-----------------|--------|-------------|--------|----------|--------|--------|--------|
| March 31, 2011:          |   | (In thousands) |      |
| Commercial               |   | $              | 141,620   |            |   | $           | 136    |     |   | $      | 3,803  |   |   | $ | - |   |   | $ | 145,559 |   |
| Commercial real estate   |   |           | 394,467   |            |   |        | 762    |     |   |   | 28,591 |   |   |   | - |   |   |   | 423,820 |   |
| Residential real estate  |   |           | 384,074   |            |   |        | 694    |     |   |   | 16,268 |   |   |   | - |   |   |   | 401,036 |   |
| Construction real estate |   |           | 142,395   |            |   |        | -      |     |   |   | 26,440 |   |   |   | - |   |   |   | 168,835 |   |
| Installment and other    |   |           | 45,875    |            |   |        | 49     |     |   |   | 2,998  |   |   |   | - |   |   |   | 48,922 |   |
| Total                    |   | $              | 1,108,431 |            |   | $           | 1,641  |     |   | $      | 78,100 |   |   | $ | - |   |   | $ | 1,188,172 |   |
|                     |   |           |      |            |   |        |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:       |   |
| Commercial               |   | $              | 146,162   |            |   | $           | 682    |     |   | $      | 3,143  |   |   | $ | - |   |   | $ | 149,987 |   |
| Commercial real estate   |   |           | 394,673   |            |   |        | 258    |     |   |   | 30,241 |   |   |   | - |   |   |   | 425,172 |   |
| Residential real estate  |   |           | 387,636   |            |   |        | 151    |     |   |   | 12,926 |   |   |   | - |   |   |   | 400,713 |   |
| Construction real estate |   |           | 138,624   |            |   |        | -      |     |   |   | 26,097 |   |   |   | - |   |   |   | 164,721 |   |
| Installment and other    |   |           | 48,404    |            |   |        | -      |     |   |   | 3,228  |   |   |   | - |   |   |   | 51,632 |   |
| Total                    |   | $              | 1,115,499 |            |   | $           | 1,091  |     |   | $      | 75,635 |   |   | $ | - |   |   | $ | 1,192,225 |   |

|                     |   | Pass           |      | Special Mention |   | Substandard |   | Doubtful |   | Total  |   |
|--------------------------|--------|----------------|-----------|-----------------|--------|-------------|--------|----------|--------|--------|--------|
| March 31, 2011:          |   | (In thousands) |      |
| Current                  |   | $              | 1,106,961 |            |   | $           | 1,098  |     |   | $      | 15,830 |   |   | $ | - |   |   | $ | 1,123,889 |   |
| Past due 30-59 days      |   |           | 1,175     |            |   |        | 543    |     |   |   | 245    |   |   |   | - |   |   |   | 1,963 |   |
| Past due 60-89 days      |   |           | 295       |            |   |        | -      |     |   |   | 358    |   |   |   | - |   |   |   | 653 |   |
| Past due 90 days or more |   |           | -         |            |   |        | -      |     |   |   | 61,667 |   |   |   | - |   |   |   | 61,667 |   |
| Total                    |   | $              | 1,108,431 |            |   | $           | 1,641  |     |   | $      | 78,100 |   |   | $ | - |   |   | $ | 1,188,172 |   |
|                     |   |           |      |            |   |        |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:       |   |
| Current                  |   | $              | 1,111,092 |            |   | $           | 1,091  |     |   | $      | 18,083 |   |   | $ | - |   |   | $ | 1,130,266 |   |
| Past due 30-59 days      |   |           | 3,903     |            |   |        | -      |     |   |   | 959    |   |   |   | - |   |   |   | 4,862 |   |
| Past due 60-89 days      |   |           | 504       |            |   |        | -      |     |   |   | 10,283 |   |   |   | - |   |   |   | 10,787 |   |
| Past due 90 days or more |   |           | -         |            |   |        | -      |     |   |   | 46,310 |   |   |   | - |   |   |   | 46,310 |   |
| Total                    |   | $              | 1,115,499 |            |   | $           | 1,091  |     |   | $      | 75,635 |   |   | $ | - |   |   | $ | 1,192,225 |   |

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Table of contents

|                                |   | Unpaid Principal Balance |   | Recorded Investment |   | Partial Charge-offs |   | Allowance for Loan Losses Allocated |   | Average Recorded Investment |   | Interest Income Recognized |   |
|-------------------------------------|--------|--------------------------|--------|---------------------|--------|---------------------|--------|-------------------------------------|--------|-----------------------------|--------|----------------------------|--------|
| March 31, 2011:                     |   | (In thousands)           |   |
| With no related allowance recorded: |   |
| Commercial                          |   | $                        | 4,835  |                |   | $                   | 2,862  |                                |   | $                           | 1,973  |                       |   | $ | - |   |   | $ | 2,734 |   |   | $ | 5 |   |
| Commercial real estate              |   |                     | 20,154 |                |   |                | 19,588 |                                |   |                        | 566    |                       |   |   | - |   |   |   | 21,745 |   |   |   | 14 |   |
| Residential real estate             |   |                     | 15,632 |                |   |                | 14,781 |                                |   |                        | 851    |                       |   |   | - |   |   |   | 13,258 |   |   |   | 14 |   |
| Construction real estate            |   |                     | 26,445 |                |   |                | 22,308 |                                |   |                        | 4,137  |                       |   |   | - |   |   |   | 19,589 |   |   |   | 3 |   |
| Installment and other               |   |                     | 4,456  |                |   |                | 2,885  |                                |   |                        | 1,571  |                       |   |   | - |   |   |   | 3,001 |   |   |   | 6 |   |
| With an allowance recorded:         |   |
| Commercial                          |   |                     | 1,114  |                |   |                | 1,114  |                                |   |                        | -      |                       |   |   | 49 |   |   | $ | 797 |   |   | $ | 7 |   |
| Commercial real estate              |   |                     | 379    |                |   |                | 379    |                                |   |                        | -      |                       |   |   | 44 |   |   |   | 380 |   |   |   | 5 |   |
| Residential real estate             |   |                     | 3,669  |                |   |                | 3,669  |                                |   |                        | -      |                       |   |   | 605 |   |   |   | 3,549 |   |   |   | 34 |   |
| Construction real estate            |   |                     | -      |                |   |                | -      |                                |   |                        | -      |                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Installment and other               |   |                     | 1,162  |                |   |                | 1,162  |                                |   |                        | -      |                       |   |   | 104 |   |   |   | 812 |   |   |   | 7 |   |
| Total                               |   | $                        | 77,846 |                |   | $                   | 68,748 |                                |   | $                           | 9,098  |                       |   | $ | 802 |   |   | $ | 65,865 |   |   | $ | 95 |   |
|                                |   |                     |   |                |   |                |   |                                |   |                        |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010:                  |   |
| With no related allowance recorded: |   |
| Commercial                          |   | $                        | 4,484  |                |   | $                   | 2,606  |                                |   | $                           | 1,878  |                       |   | $ | - |   |   | $ | 2,509 |   |   | $ | 24 |   |
| Commercial real estate              |   |                     | 24,442 |                |   |                | 23,901 |                                |   |                        | 541    |                       |   |   | - |   |   |   | 21,609 |   |   |   | 212 |   |
| Residential real estate             |   |                     | 12,381 |                |   |                | 11,734 |                                |   |                        | 647    |                       |   |   | - |   |   |   | 11,624 |   |   |   | 114 |   |
| Construction real estate            |   |                     | 19,124 |                |   |                | 15,918 |                                |   |                        | 3,206  |                       |   |   | - |   |   |   | 16,008 |   |   |   | 157 |   |
| Installment and other               |   |                     | 4,460  |                |   |                | 3,117  |                                |   |                        | 1,343  |                       |   |   | - |   |   |   | 3,430 |   |   |   | 34 |   |
| With an allowance recorded:         |   |
| Commercial                          |   |                     | 479    |                |   |                | 479    |                                |   |                        | -      |                       |   |   | 15 |   |   |   | 479 |   |   |   | 4 |   |
| Commercial real estate              |   |                     | 380    |                |   |                | 380    |                                |   |                        | -      |                       |   |   | 45 |   |   |   | 380 |   |   |   | 5 |   |
| Residential real estate             |   |                     | 3,429  |                |   |                | 3,429  |                                |   |                        | -      |                       |   |   | 338 |   |   |   | 3,429 |   |   |   | 37 |   |
| Construction real estate            |   |                     | -      |                |   |                | -      |                                |   |                        | -      |                       |   |   | - |   |   |   | - |   |   |   | - |   |
| Installment and other               |   |                     | 461    |                |   |                | 461    |                                |   |                        | -      |                       |   |   | 80 |   |   |   | 460 |   |   |   | 16 |   |
| Total                               |   | $                        | 69,640 |                |   | $                   | 62,025 |                                |   | $                           | 7,615  |                       |   | $ | 478 |   |   | $ | 59,928 |   |   | $ | 603 |   |

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Table of contents

|                                        |   | Commercial     |    | Commercial real estate |   | Residential real estate |    | Construction real estate |   | Installment and other |    | Unallocated |   | Total  |    |
|---------------------------------------------|--------|----------------|---------|------------------------|--------|-------------------------|---------|--------------------------|--------|-----------------------|---------|-------------|--------|--------|---------|
| March 31, 2011                              |   | (In thousands) |    |
| Allowance for loan losses:                  |   |
|                                        |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |
| Beginning balance                           |   | $              | 5,857   |                   |   | $                       | 7,011   |                     |   | $                     | 4,093   |        |   | $      | 7,322   |   |   | $ | 4,122 |   |   | $ | 317 |   |   | $ | 28,722 |   |
| Provision for possible loan losses          |   |           | 28      |                   |   |                    | 599     |                     |   |                  | 1,580   |        |   |   | (520    | ) |   |   | 215 |   |   |   | (452 | ) |   |   | 1,450 |   |
| Charge-offs                                 |   |           | (285    | )                      |   |                    | (240    | )                        |   |                  | (1,106  | )           |   |   | (89     | ) |   |   | (302 | ) |   |   | - |   |   |   | (2,022 | ) |
| Recoveries                                  |   |           | 9       |                   |   |                    | 9       |                     |   |                  | 179     |        |   |   | 14      |   |   |   | 23 |   |   |   | - |   |   |   | 234 |   |
| Net charge-offs                             |   |           | (276    | )                      |   |                    | (231    | )                        |   |                  | (927    | )           |   |   | (75     | ) |   |   | (279 | ) |   |   | - |   |   |   | (1,788 | ) |
| Ending balance                              |   | $              | 5,609   |                   |   | $                       | 7,379   |                     |   | $                     | 4,746   |        |   | $      | 6,727   |   |   | $ | 4,058 |   |   | $ | (135 | ) |   | $ | 28,384 |   |
| Period-end amount allocated to:             |   |
| Loans individually evaluated for impairment |   | $              | 49      |                   |   | $                       | 44      |                     |   | $                     | 605     |        |   | $      | -       |   |   | $ | 104 |   |   | $ | - |   |   | $ | 802 |   |
| Loans collectively evaluated for impairment |   |           | 5,560   |                   |   |                    | 7,335   |                     |   |                  | 4,141   |        |   |   | 6,727   |   |   |   | 3,954 |   |   |   | (135 | ) |   |   | 27,582 |   |
| Ending balance                              |   | $              | 5,609   |                   |   | $                       | 7,379   |                     |   | $                     | 4,746   |        |   | $      | 6,727   |   |   | $ | 4,058 |   |   | $ | (135 | ) |   | $ | 28,384 |   |
|                                        |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                      |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |
| Individually evaluated for impairment       |   | $              | 3,976   |                   |   | $                       | 19,967  |                     |   | $                     | 18,450  |        |   | $      | 22,308  |   |   | $ | 4,047 |   |   | $ | - |   |   | $ | 68,748 |   |
| Collectively evaluated for impairment       |   |           | 141,583 |                   |   |                    | 403,853 |                     |   |                  | 382,586 |        |   |   | 146,527 |   |   |   | 44,875 |   |   |   | - |   |   |   | 1,119,424 |   |
| Total ending loans balance                  |   | $              | 145,559 |                   |   | $                       | 423,820 |                     |   | $                     | 401,036 |        |   | $      | 168,835 |   |   | $ | 48,922 |   |   | $ | - |   |   | $ | 1,188,172 |   |

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|                                        |   | Commercial     |    | Commercial real estate |   | Residential real estate |    | Construction real estate |   | Installment and other |    | Unallocated |   | Total  |    |
|---------------------------------------------|--------|----------------|---------|------------------------|--------|-------------------------|---------|--------------------------|--------|-----------------------|---------|-------------|--------|--------|---------|
| March 31, 2010                              |   | (In thousands) |    |
|                                        |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |
| Beginning balance                           |   | $              | 4,182   |                   |   | $                       | 6,316   |                     |   | $                     | 2,100   |        |   | $      | 8,637   |   |   | $ | 3,080 |   |   | $ | 189 |   |   | $ | 24,504 |   |
| Provision for possible loan losses          |   |           | 3,152   |                   |   |                    | (127    | )                        |   |                  | 2,106   |        |   |   | (1,550  | ) |   |   | 865 |   |   |   | (189 | ) |   |   | 4,257 |   |
| Charge-offs                                 |   |           | (1,310  | )                      |   |                    | (112    | )                        |   |                  | (1,501  | )           |   |   | (452    | ) |   |   | (684 | ) |   |   | - |   |   |   | (4,059 | ) |
| Recoveries                                  |   |           | 23      |                   |   |                    | 0       |                     |   |                  | 8       |        |   |   | 60      |   |   |   | 29 |   |   |   | - |   |   |   | 120 |   |
| Net charge-offs                             |   |           | (1,287  | )                      |   |                    | (112    | )                        |   |                  | (1,493  | )           |   |   | (392    | ) |   |   | (655 | ) |   |   | - |   |   |   | (3,939 | ) |
| Ending balance                              |   | $              | 6,047   |                   |   | $                       | 6,077   |                     |   | $                     | 2,713   |        |   | $      | 6,695   |   |   | $ | 3,290 |   |   | $ | - |   |   | $ | 24,822 |   |
| Period-end amount allocated to:             |   |
| Loans individually evaluated for impairment |   | $              | 10      |                   |   | $                       | -       |                     |   | $                     | 88      |        |   | $      | 90      |   |   | $ | 75 |   |   | $ | - |   |   | $ | 263 |   |
| Loans collectively evaluated for impairment |   |           | 6,037   |                   |   |                    | 6,077   |                     |   |                  | 2,625   |        |   |   | 6,605   |   |   |   | 3,215 |   |   |   | - |   |   |   | 24,559 |   |
| Ending balance                              |   | $              | 6,047   |                   |   | $                       | 6,077   |                     |   | $                     | 2,713   |        |   | $      | 6,695   |   |   | $ | 3,290 |   |   | $ | - |   |   | $ | 24,822 |   |
|                                        |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                      |   |           |    |                   |   |                    |    |                     |   |                  |    |        |   |   |    |   |   |   |   |   |   |
| Individually evaluated for impairment       |   | $              | 4,922   |                   |   | $                       | 28,559  |                     |   | $                     | 14,150  |        |   | $      | 22,919  |   |   | $ | 3,840 |   |   | $ | - |   |   | $ | 74,390 |   |
| Collectively evaluated for impairment       |   |           | 130,159 |                   |   |                    | 407,065 |                     |   |                  | 405,363 |        |   |   | 157,736 |   |   |   | 49,022 |   |   |   | - |   |   |   | 1,149,345 |   |
| Total ending loans balance                  |   | $              | 135,081 |                   |   | $                       | 435,624 |                     |   | $                     | 419,513 |        |   | $      | 180,655 |   |   | $ | 52,862 |   |   | $ | - |   |   | $ | 1,223,735 |   |

|                    |   | AtMarch 31, 2011 |   |   | AtDecember 31, 2010 |   |
|-------------------------|--------|------------------|--------|--------|---------------------|--------|
|                    |   | (In thousands)   |   |
| Construction property   |   | $                | 14,682 |   |                | $      | 14,872 |   |
| Residential real estate |   |             | 2,176  |   |                |   | 3,427 |   |
| Commercial real estate  |   |             | 4,360  |   |                |   | 3,561 |   |
| Total                   |   | $                | 21,218 |   |                | $      | 21,860 |   |

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| Maturity Date          |   | Rate   |   | Principal due |        | Amount |   |
|------------------------|--------|--------|--------|---------------|-------------|--------|--------|
| (Dollars in thousands) |   |
| 03/23/2015             |   |   | 3.05   | %        | At maturity |   | $      | 20,000 |   |
| 04/27/2021             |   |   | 6.34   | %        | At maturity |   |   | 2,300 |   |
|                   |   |   |   |          |        |   | $      | 22,300 |   |

|                                                       |   | Trust I                |   |   | Trust III         |             |   | Trust IV          |   |   | Trust V            |   |
|------------------------------------------------------------|--------|------------------------|--------|--------|-------------------|------------------|--------|-------------------|--------|--------|--------------------|--------|
|                                                       |   | (Dollars in thousands) |   |
| Date of Issue                                              |   | March 23, 2000         |   |   | May 11, 2004      |             |   | June 29, 2005     |   |   | September 21, 2006 |   |
| Amount of trust preferred securities issued                |   | $                      | 10,000 |   |              | $                | 6,000  |              |   | $      | 10,000             |   |   | $ | 10,000 |   |
| Rate on trust preferred securities                         |   |                   | 10.875 | %      |              | 3.01% (variable) |   |              |   | 6.88   | %                  |   |   | 6.83 | % |
| Maturity                                                   |   | March 8, 2030          |   |   | September 8, 2034 |             |   | November 23, 2035 |   |   | December 15, 2036  |   |
| Date of first redemption                                   |   | March 8, 2010          |   |   | September 8, 2009 |             |   | August 23, 2010   |   |   | September 15, 2011 |   |
| Common equity securities issued                            |   | $                      | 310    |   |              | $                | 186    |              |   | $      | 310                |   |   | $ | 310 |   |
| Junior subordinated deferrable interest debentures owed    |   | $                      | 10,310 |   |              | $                | 6,186  |              |   | $      | 10,310             |   |   | $ | 10,310 |   |
| Rate on junior subordinated deferrable interest debentures |   |                   | 10.875 | %      |              | 3.01% (variable) |   |              |   | 6.88   | %                  |   |   | 6.83 | % |

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Note12. Commitments, Contingencies and Off-Balance Sheet Activities

|                                       |   | Contract Amount |    |
|--------------------------------------------|--------|-----------------|---------|
|                                       |   | March 31, 2011  |    |   | December 31, 2010 |   |
|                                       |   | (In thousands)  |    |
| Unfunded commitments under lines of credit |   | $               | 161,167 |   |   | $ | 164,850 |   |
| Commercial and standby letters of credit   |   | $               | 13,210  |   |   | $ | 14,051 |   |

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|                                           | Number ofshares issued | Dividend rate                            |   | Liquidation value per share |   |   | Original cost, in thousands |   |
|------------------------------------------------|------------------------|------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
| Series A cumulative perpetual preferred shares | 35,539                 | 5 % for the first 5 years, thereafter 9% |   | $                           | 1,000  |   |                        | $      | 33,437 |   |
| Series B cumulative perpetual preferred shares | 1,777                  | 9%                                       |   |                        | 1,000  |   |                        |   | 2,102 |   |

Note 15. Derivative Financial Instruments

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| · | Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| March 31, 2011                                                                                      |   | Total          |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                                                                                |   | (In thousands) |   |
| Financial Assets:                                                                                   |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |
| Investment securities available for sale:                                                           |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |
| U.S. Government sponsored agencies                                                                  |   | $              | 32,494 |   |                                                           | $      | -      |                                          |   | $      | 32,494                                    |   |   | $ | - |   |
| States and political subdivisions                                                                   |   |           | 23,035 |   |                                                           |   | -      |                                          |   |   | 23,035                                    |   |   |   | - |   |
| Residential mortgage-backed securities                                                              |   |           | 79,199 |   |                                                           |   | -      |                                          |   |   | 79,199                                    |   |   |   | - |   |
| Interest rate lock commitments, mandatory forward delivery commitments and pair-offs                |   |           | 80     |   |                                                           |   | -      |                                          |   |   | 80                                        |   |   |   | - |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Financial Liabilities:                                                                              |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Interest rate lock commitments, mandatory forward delivery commitments and pair-offs                |   | $              | -      |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | - |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Off-balance-sheet instruments:                                                                      |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Loan commitments and standby letters of credit                                                      |   | $              | 15     |   |                                                           | $      | -      |                                          |   | $      | 15                                        |   |   | $ | - |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| December 31, 2010                                                                                   |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Financial Assets:                                                                                   |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Investment securities available for sale:                                                           |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| U.S. Government sponsored agencies                                                                  |   | $              | 42,735 |   |                                                           | $      | -      |                                          |   | $      | 42,735                                    |   |   | $ | - |   |
| States and political subdivisions                                                                   |   |           | 20,584 |   |                                                           |   | -      |                                          |   |   | 20,584                                    |   |   |   | - |   |
| Residential mortgage-backed securities                                                              |   |           | 99,272 |   |                                                           |   | -      |                                          |   |   | 99,272                                    |   |   |   | - |   |
| Interest rate lock commitments, mandatory forward delivery commitments and pair-offs, net asset     |   |           | 567    |   |                                                           |   | -      |                                          |   |   | 567                                       |   |   |   | - |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Financial Liabilities:                                                                              |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Interest rate lock commitments, mandatory forward delivery commitments and pair-offs, net liability |   | $              | 25     |   |                                                           | $      | -      |                                          |   | $      | 25                                        |   |   | $ | - |   |
|                                                                                                |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Off-balance-sheet instruments:                                                                      |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Loan commitments and standby letters of credit                                                      |   | $              | 13     |   |                                                           | $      | -      |                                          |   | $      | 13                                        |   |   | $ | - |   |

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| March 31, 2011            |   | Total          |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|---------------------------|--------|----------------|--------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|
|                      |   | (In thousands) |   |
| Financial Assets:         |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |
| Impaired loans            |   | $              | 9,190  |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | 9,190 |   |
| Loans held for sale       |   |           | -      |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | - |   |
| Mortgage servicing rights |   |           | 2,123  |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | 2,123 |   |
| Non-Financial Assets:     |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Foreclosed assets         |   |           | 14,156 |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | 14,156 |   |
|                      |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| December 31, 2010         |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
|                      |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Financial Assets:         |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Impaired loans            |   | $              | 13,971 |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | 13,971 |   |
| Loans held for sale       |   |           | 12,786 |   |                                                           |   | -      |                                          |   |   | 12,786                                    |   |   |   | - |   |
| Mortgage servicing rights |   |           | 2,182  |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | 2,182 |   |
| Non-Financial Assets:     |   |           |   |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Foreclosed assets         |   |           | 13,794 |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | 13,794 |   |

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|                                                                |   | March 31, 2011  |      |   | December 31, 2010 |   |
|---------------------------------------------------------------------|--------|-----------------|-----------|--------|-------------------|--------|
|                                                                |   | Carrying amount |      |   | Fair value        |   |   | Carrying amount |   |   | Fair value |   |
|                                                                |   | (In thousands)  |      |
| Financial assets:                                                   |   |            |      |   |              |   |   |   |   |   |   |   |
| Cash and due from banks                                             |   | $               | 18,305    |   |              | $      | 18,305 |   |   | $ | 16,765 |   |   | $ | 16,765 |   |
| Interest-bearing deposits with banks                                |   |            | 101,062   |   |              |   | 101,062 |   |   |   | 89,316 |   |   |   | 89,316 |   |
| Federal funds sold and securities purchased under resell agreements |   |            | 393       |   |              |   | 393 |   |   |   | 110 |   |   |   | 110 |   |
| Investments:                                                        |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Available for sale                                                  |   |            | 134,728   |   |              |   | 134,728 |   |   |   | 162,591 |   |   |   | 162,591 |   |
| Held to maturity                                                    |   |            | 11,026    |   |              |   | 10,786 |   |   |   | 11,107 |   |   |   | 10,951 |   |
| Other investments                                                   |   |            | 9,218     |   |              |   | 9,218 |   |   |   | 9,335 |   |   |   | 9,335 |   |
| Loans, net                                                          |   |            | 1,157,520 |   |              |   | 1,189,069 |   |   |   | 1,161,216 |   |   |   | 1,170,701 |   |
| Loans held for sale                                                 |   |            | 5,174     |   |              |   | 5,242 |   |   |   | 25,080 |   |   |   | 25,223 |   |
| Accrued interest receivable                                         |   |            | 6,736     |   |              |   | 6,736 |   |   |   | 6,736 |   |   |   | 6,736 |   |
| Mortgage servicing rights                                           |   |            | 8,155     |   |              |   | 9,368 |   |   |   | 7,960 |   |   |   | 8,585 |   |
| Derivative financial instruments                                    |   |            | 80        |   |              |   | 80 |   |   |   | 567 |   |   |   | 567 |   |
|                                                                |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                                              |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing deposits                                       |   | $               | 114,053   |   |              | $      | 114,053 |   |   | $ | 109,891 |   |   | $ | 109,891 |   |
| Interest-bearing deposits                                           |   |            | 1,202,399 |   |              |   | 1,190,689 |   |   |   | 1,248,454 |   |   |   | 1,253,836 |   |
| Short-term borrowings                                               |   |            | 10,000    |   |              |   | 10,173 |   |   |   | 1,152 |   |   |   | 1,155 |   |
| Long-term borrowings                                                |   |            | 22,300    |   |              |   | 23,354 |   |   |   | 32,300 |   |   |   | 33,886 |   |
| Junior subordinated debt owed to unconsolidated trusts              |   |            | 37,116    |   |              |   | 19,580 |   |   |   | 37,116 |   |   |   | 18,506 |   |
| Accrued interest payable                                            |   |            | 2,696     |   |              |   | 2,696 |   |   |   | 4,873 |   |   |   | 4,873 |   |
| Derivative financial instruments                                    |   |            | -         |   |              |   | - |   |   |   | 25 |   |   |   | 25 |   |
|                                                                |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet instruments:                                      |   |            |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Standby letters of credit                                           |   | $               | 15        |   |              | $      | 15 |   |   | $ | 13 |   |   | $ | 13 |   |

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Allowance for Loan Losses

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|                                        |   | Three Months Ended March 31, |   |
|---------------------------------------------|--------|------------------------------|--------|
|                                        |   | 2011                         |   |   | 2010 |   |
|                                        |   | (In thousands)               |   |
| Balance at beginning of period              |   | $                            | 9,030  |   |   | $ | 8,525 |   |
| Servicing rights originated and capitalized |   |                         | 498    |   |   |   | 307 |   |
| Amortization                                |   |                         | (383   | ) |   |   | (502 | ) |
|                                        |   | $                            | 9,145  |   |   | $ | 8,330 |   |

|                                        |   | Three Months Ended March 31, |   |
|---------------------------------------------|--------|------------------------------|--------|
|                                        |   | 2011                         |   |   | 2010 |   |
|                                        |   | (In thousands)               |   |
| Balance at beginning of period              |   | $                            | (1,070 | ) |   | $ | (878 | ) |
| Aggregate reductions credited to operations |   |                         | 80     |   |   |   | 332 |   |
| Aggregate additions charged to operations   |   |                         | -      |   |   |   | (139 | ) |
|                                        |   | $                            | (990   | ) |   | $ | (685 | ) |

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|                                       |   | March 31, 2011 |   |   | December 31, 2010 |   |
|--------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Prepayment Standard Assumption (PSA) speed |   |           | 210.00 | %      |              |   | 233.33 | % |
| Discount rate                              |   |           | 10.75  |   |              |   | 10.75 |   |
| Earnings rate                              |   |           | 2.47   |   |              |   | 2.17 |   |

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Results of Operations

Note 15, Derivative Financial Instruments 

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|                                                                        |   | Three Months Ended March 31, |      |
|-----------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                        |   | 2011                         |      |   | 2010 |   |
|                                                                        |   | Average Balance              |      |   | Interest |   |   | Yield/Rate |   |   | Average Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                                        |   | (Dollars in thousands)       |      |
| Interest-earning Assets:                                                    |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)                                                                    |   | $                            | 1,191,536 |   |   | $ | 15,797 |   |   |   | 5.38 | % |   | $ | 1,236,032 |   |   | $ | 17,272 |   |   |   | 5.67 | % |
| Taxable investment securities                                               |   |                         | 134,135   |   |   |   | 463 |   |   |   | 1.40 |   |   |   | 116,315 |   |   |   | 633 |   |   |   | 2.21 |   |
| Investment securities exempt from federal income taxes (2)                  |   |                         | 32,768    |   |   |   | 459 |   |   |   | 5.68 |   |   |   | 37,491 |   |   |   | 482 |   |   |   | 5.21 |   |
| Federal funds sold                                                          |   |                         | 226       |   |   |   | - |   |   |   | - |   |   |   | 511 |   |   |   | - |   |   |   | - |   |
| Other interest-bearing deposits                                             |   |                         | 89,958    |   |   |   | 54 |   |   |   | 0.24 |   |   |   | 138,583 |   |   |   | 105 |   |   |   | 0.31 |   |
| Investment in unconsolidated trust subsidiaries                             |   |                         | 1,116     |   |   |   | 22 |   |   |   | 7.99 |   |   |   | 1,116 |   |   |   | 20 |   |   |   | 7.27 |   |
| Total interest-earning assets                                               |   |                         | 1,449,739 |   |   |   | 16,795 |   |   |   | 4.70 |   |   |   | 1,530,048 |   |   |   | 18,512 |   |   |   | 4.91 |   |
| Non-interest-earning assets                                                 |   |                         | 79,184    |   |   |   |   |   |   |   |   |   |   |   | 87,038 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                |   | $                            | 1,528,923 |   |   |   |   |   |   |   |   |   |   | $ | 1,617,086 |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing Liabilities:                                               |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                   |   |                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW deposits                                                                |   | $                            | 126,929   |   |   | $ | 49 |   |   |   | 0.16 | % |   | $ | 102,279 |   |   | $ | 70 |   |   |   | 0.28 | % |
| Money market deposits                                                       |   |                         | 253,452   |   |   |   | 120 |   |   |   | 0.19 |   |   |   | 211,650 |   |   |   | 137 |   |   |   | 0.26 |   |
| Savings deposits                                                            |   |                         | 311,193   |   |   |   | 126 |   |   |   | 0.16 |   |   |   | 371,193 |   |   |   | 267 |   |   |   | 0.29 |   |
| Time deposits over $100,000                                                 |   |                         | 327,966   |   |   |   | 1,274 |   |   |   | 1.58 |   |   |   | 418,953 |   |   |   | 2,358 |   |   |   | 2.28 |   |
| Time deposits under $100,000                                                |   |                         | 208,448   |   |   |   | 784 |   |   |   | 1.53 |   |   |   | 215,311 |   |   |   | 1,131 |   |   |   | 2.13 |   |
| Short-term borrowings, including ESOP borrowings under 1 year               |   |                         | 7,246     |   |   |   | 40 |   |   |   | 2.24 |   |   |   | 18,938 |   |   |   | 216 |   |   |   | 4.63 |   |
| Long-term borrowings, including ESOP borrowings over 1 year                 |   |                         | 25,078    |   |   |   | 214 |   |   |   | 3.46 |   |   |   | 14,549 |   |   |   | 128 |   |   |   | 3.57 |   |
| Long-term capital lease obligations                                         |   |                         | 2,211     |   |   |   | 67 |   |   |   | 12.29 |   |   |   | 2,211 |   |   |   | 67 |   |   |   | 12.29 |   |
| Junior subordinated debt owed to unconsolidated trusts                      |   |                         | 37,116    |   |   |   | 723 |   |   |   | 7.90 |   |   |   | 37,116 |   |   |   | 683 |   |   |   | 7.46 |   |
| Total interest-bearing liabilities                                          |   |                         | 1,299,639 |   |   |   | 3,397 |   |   |   | 1.06 |   |   |   | 1,392,200 |   |   |   | 5,057 |   |   |   | 1.47 |   |
| Demand deposits--non-interest-bearing                                       |   |                         | 53,713    |   |   |   |   |   |   |   |   |   |   |   | 45,800 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                      |   |                         | 50,806    |   |   |   |   |   |   |   |   |   |   |   | 55,848 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity, including stock owned by ESOP                         |   |                         | 124,765   |   |   |   |   |   |   |   |   |   |   |   | 123,238 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders equity                                   |   | $                            | 1,528,923 |   |   |   |   |   |   |   |   |   |   | $ | 1,617,086 |   |   |   |   |   |   |   |   |   |
| Net interest income on a fully tax-equivalent basis/interest rate spread(3) |   |                         | $         | 13,398 |   |   |   | 3.64 | % |   |   |   |   |   | $ | 13,455 |   |   |   | 3.43 | % |
| Net interest margin on a fully tax-equivalent basis(4)                      |   |                         |      | 3.75 | % |   |   |   |   |   |   |   |   |   |   | 3.57 | % |
| Net interest margin(4)                                                      |   |                         |      |   |   |   |   | 3.70 | % |   |   |   |   |   |   |   |   |   |   | 3.52 | % |

| (1) | Average loans include non-accrual loans of $55.1 million and $67.8 million for March 31, 2011 and 2010, respectively. Interest income includes loan origination fees of $407 thousand and $540 thousand for the three months ended March 31, 2011 and 2010, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Non-taxable investment income is presented on a fully tax-equivalent basis, adjusting for federal and state exemption of interest income and certain other permanent tax differences. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (3) | Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities and is presented on a fully tax-equivalent basis. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Net interest margin represents net interest income as a percentage of average interest-earning assets. |
|-----|--------------------------------------------------------------------------------------------------------|

|                                             |   | Three Months Ended March 31, |   |
|--------------------------------------------------|--------|------------------------------|--------|
|                                             |   | 2011                         |   |   | 2010 |   |
|                                             |   | (In thousands)               |   |
| Net interest income                              |   | $                            | 13,220 |   |   | $ | 13,271 |   |
| Tax-equivalent adjustment to net interest income |   |                         | 178    |   |   |   | 184 |   |
| Net interest income, fully tax-equivalent basis  |   | $                            | 13,398 |   |   | $ | 13,455 |   |

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|                                                                |   | Three Months Ended March 31, |   |
|---------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                |   | 2011 Compared to 2010        |   |
|                                                                |   | Change Due to Volume         |   |   | Change Due to Rate |   |   | Total Change |   |
|                                                                |   | (In thousands)               |   |
| Interest-earning Assets:                                            |   |                         |   |   |   |   |   |
|  Loans                                                         |   | $                            | (609   | ) |   | $ | (866 | ) |   | $ | (1,475 | ) |
|  Taxable investment securities                                 |   |                         | 87     |   |   |   | (257 | ) |   |   | (170 | ) |
|  Investment securities exempt from federal income taxes(1)     |   |                         | (64    | ) |   |   | 41 |   |   |   | (23 | ) |
|  Federal funds sold                                            |   |                         | -      |   |   |   | - |   |   |   | - |   |
|  Other interest-bearing deposits                               |   |                         | (32    | ) |   |   | (19 | ) |   |   | (51 | ) |
|  Investment in unconsolidated trust subsidiaries               |   |                         | -      |   |   |   | 2 |   |   |   | 2 |   |
|  Total increase (decrease) in interest income                  |   | $                            | (618   | ) |   | $ | (1,099 | ) |   | $ | (1,717 | ) |
| Interest-bearing Liabilities:                                       |   |                         |   |   |   |
|  Now deposits                                                  |   | $                            | 15     |   |   | $ | (36 | ) |   | $ | (21 | ) |
|  Money market deposits                                         |   |                         | 24     |   |   |   | (41 | ) |   |   | (17 | ) |
|  Savings deposits                                              |   |                         | (38    | ) |   |   | (103 | ) |   |   | (141 | ) |
|  Time deposits over $100,000                                   |   |                         | (447   | ) |   |   | (637 | ) |   |   | (1,084 | ) |
|  Time deposits under $100,000                                  |   |                         | (35    | ) |   |   | (312 | ) |   |   | (347 | ) |
|  Short-term borrowings, including ESOP borrowings under 1 year |   |                         | (96    | ) |   |   | (80 | ) |   |   | (176 | ) |
|  Long-term borrowings, including ESOP borrowings over 1 year   |   |                         | 90     |   |   |   | (4 | ) |   |   | 86 |   |
|  Long-term capital lease obligations                           |   |                         | -      |   |   |   | - |   |   |   | - |   |
|  Junior subordinated debt owed to unconsolidated trusts        |   |                         | -      |   |   |   | 40 |   |   |   | 40 |   |
|  Total increase (decrease) in interest expense                 |   | $                            | (487   | ) |   | $ | (1,173 | ) |   | $ | (1,660 | ) |
|  Increase (decrease) in net interest income                    |   | $                            | (131   | ) |   | $ | 74 |   |   | $ | (57 | ) |

| (1) | Non-taxable investment income is presented on a fully tax-equivalent basis, adjusting for federal and state exemption of interest income and certain other permanent income tax differences. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | Three Months Ended March 31, |   |   |   |   |
|------------------------------------|--------|------------------------------|--------|--------|--------|--------|
|                               |   | 2011                         |   |   | 2010   |   |   | Net difference |   |
|                               |   | (In thousands)               |   |
|  Other income:                |   |                         |   |   |   |   |   |   |   |
|  Mortgage loan servicing fees |   | $                            | 667    |   |   | $      | 646 |   |   | $ | 21 |   |
|  Trust fees                   |   |                         | 460    |   |   |   | 355 |   |   |   | 105 |   |
|  Loan and other fees          |   |                         | 752    |   |   |   | 666 |   |   |   | 86 |   |
|  Service charges on deposits  |   |                         | 383    |   |   |   | 408 |   |   |   | (25 | ) |
|  Gain on sale of loans        |   |                         | 1,280  |   |   |   | 720 |   |   |   | 560 |   |
|  Gain on sale of securities   |   |                         | 171    |   |   |   | 47 |   |   |   | 124 |   |
|  Title insurance premiums     |   |                         | 164    |   |   |   | 188 |   |   |   | (24 | ) |
|  Other operating income       |   |                         | 107    |   |   |   | 26 |   |   |   | 81 |   |
|                               |   | $                            | 3,984  |   |   | $      | 3,056 |   |   | $ | 928 |   |

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|                                                          |   | Three Months Ended March 31, |   |   |   |   |
|---------------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
|                                                          |   | 2011                         |   |   | 2010   |   |   | Net difference |   |
|                                                          |   | (In thousands)               |   |
|  Other expenses:                                         |   |                         |   |   |   |   |   |   |   |
|  Salaries and employee benefits                          |   | $                            | 5,501  |   |   | $      | 5,078 |   |   | $ | 423 |   |
|  Occupancy                                               |   |                         | 934    |   |   |   | 977 |   |   |   | (43 | ) |
|  Data processing                                         |   |                         | 788    |   |   |   | 724 |   |   |   | 64 |   |
|  Marketing                                               |   |                         | 455    |   |   |   | 356 |   |   |   | 99 |   |
|  Amortization and valuation of mortgage servicing rights |   |                         | 303    |   |   |   | 309 |   |   |   | (6 | ) |
|  Amortization and valuation of other intangible assets   |   |                         | 163    |   |   |   | 125 |   |   |   | 38 |   |
|  Supplies                                                |   |                         | 361    |   |   |   | 91 |   |   |   | 270 |   |
|  Loss on sale of other real estate owned                 |   |                         | 658    |   |   |   | 432 |   |   |   | 226 |   |
|  Postage                                                 |   |                         | 177    |   |   |   | 161 |   |   |   | 16 |   |
|  Bankcard and ATM network fees                           |   |                         | 343    |   |   |   | 163 |   |   |   | 180 |   |
|  Legal, professional and accounting fees                 |   |                         | 725    |   |   |   | 753 |   |   |   | (28 | ) |
|  FDIC insurance premiums                                 |   |                         | 761    |   |   |   | 898 |   |   |   | (137 | ) |
|  Collection expenses                                     |   |                         | 434    |   |   |   | 380 |   |   |   | 54 |   |
|  Other                                                   |   |                         | 1,027  |   |   |   | 538 |   |   |   | 489 |   |
|                                                          |   | $                            | 12,630 |   |   | $      | 10,985 |   |   | $ | 1,645 |   |

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Liquidity and Sources of Capital
Asset Liability Management
Item 3

|                                                            |   | At March 31, 2011 |    |       | At December 31, 2010 |           |    | At March 31, 2010 |   |
|-----------------------------------------------------------------|--------|-------------------|---------|------------|----------------------|----------------|---------|-------------------|--------|
|                                                            |   | Amortized Cost    |    | Fair Value |                 | Amortized Cost |    | Fair Value        |   | Amortized Cost |   | Fair Value |   |
|                                                            |   | (In thousands)    |    |
| Securities Available for Sale:                                  |   |
| U.S. Government sponsored agencies                              |   | $                 | 32,346  |       |                 | $              | 32,494  |              |   | $ | 42,551 |   |   | $ | 42,735 |   |   | $ | 53,354 |   |   | $ | 53,366 |   |
| States and political subdivisions                               |   |              | 22,454  |       |                 |           | 23,035  |              |   |   | 20,263 |   |   |   | 20,584 |   |   |   | 26,080 |   |   |   | 26,427 |   |
| Residential mortgage-backed securities                          |   |              | 78,892  |       |                 |           | 79,199  |              |   |   | 98,692 |   |   |   | 99,272 |   |   |   | 44,956 |   |   |   | 44,438 |   |
| Total securities available for sale                             |   | $                 | 133,692 |       |                 | $              | 134,728 |              |   | $ | 161,506 |   |   | $ | 162,591 |   |   | $ | 124,390 |   |   | $ | 124,231 |   |
| Securities Held to Maturity                                     |   |
| States and political subdivisions                               |   | $            | 11,026  |       |                 | $         | 10,786  |              |   | $  | 11,107 |   |   | $  | 10,951 |   |   | $  | 11,353 |   |   | $  | 10,792 |   |
| Total securities held to maturity                               |   | $                 | 11,026  |       |                 | $              | 10,786  |              |   | $ | 11,107 |   |   | $ | 10,951 |   |   | $ | 11,353 |   |   | $ | 10,792 |   |
| Other securities:                                               |   |
| Non-marketable equity securities (including FRB and FHLB stock) |   | $                 | 8,102   |       |                 | $              | 8,102   |              |   | $ | 8,219 |   |   | $ | 8,219 |   |   | $ | 8,220 |   |   | $ | 8,220 |   |
| Investment in unconsolidated trusts                             |   |              | 1,116   |       |                 |           | 1,116   |              |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Total other securities                                          |   | $                 | 9,218   |       |                 | $              | 9,218   |              |   | $ | 9,335 |   |   | $ | 9,335 |   |   | $ | 9,336 |   |   | $ | 9,336 |   |

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|                      |   | At March 31, 2011      |      |   | At December 31, 2010 |   |   | At March 31, 2010 |   |
|---------------------------|--------|------------------------|-----------|--------|----------------------|--------|--------|-------------------|--------|
|                      |   | Amount                 |      |   | Percent              |   |   | Amount            |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                      |   | (Dollars in thousands) |      |
| Commercial                |   | $                      | 145,559   |   |                 |   | 12.25  | %                 |   | $ | 149,987 |   |   |   | 12.58 | % |   | $ | 135,081 |   |   |   | 11.04 | % |
| Commercial real estate    |   |                   | 423,820   |   |                 |   | 35.67  |              |   |   | 425,172 |   |   |   | 35.66 |   |   |   | 435,624 |   |   |   | 35.60 |   |
| Residential real estate   |   |                   | 401,036   |   |                 |   | 33.75  |              |   |   | 400,713 |   |   |   | 33.61 |   |   |   | 419,513 |   |   |   | 34.28 |   |
| Construction real estate  |   |                   | 168,835   |   |                 |   | 14.21  |              |   |   | 164,721 |   |   |   | 13.82 |   |   |   | 180,655 |   |   |   | 14.76 |   |
| Installment and other     |   |                   | 48,922    |   |                 |   | 4.12   |              |   |   | 51,632 |   |   |   | 4.33 |   |   |   | 52,862 |   |   |   | 4.32 |   |
| Total loans               |   |                   | 1,188,172 |   |                 |   | 100.00 | %                 |   |   | 1,192,225 |   |   |   | 100.00 | % |   |   | 1,223,735 |   |   |   | 100.00 | % |
| Unearned income           |   |                   | (2,268    | )      |                 |   |   |              |   |   | (2,287 | ) |   |   |   |   |   |   | (2,215 | ) |   |   |   |   |
| Gross loans               |   |                   | 1,185,904 |   |                 |   |   |              |   |   | 1,189,938 |   |   |   |   |   |   |   | 1,221,520 |   |   |   |   |   |
| Allowance for loan losses |   |                   | (28,384   | )      |                 |   |   |              |   |   | (28,722 | ) |   |   |   |   |   |   | (24,822 | ) |   |   |   |   |
| Net loans                 |   | $                      | 1,157,520 |   |                 |   |   |              |   | $ | 1,161,216 |   |   |   |   |   |   | $ | 1,196,698 |   |   |   |   |   |

|                                                    |   | AtMarch 31, 2011       |   |   | AtDecember 31, 2010 |   |   | AtMarch 31, 2010 |   |
|---------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|--------|------------------|--------|
|                                                    |   | (Dollars in thousands) |   |
| Non-accruing loans                                      |   | $                      | 61,667 |   |                | $      | 49,968 |             |   | $ | 64,463 |   |
| Loans 90 days or more past due, still accruing interest |   |                   | -      |   |                |   | -      |             |   |   | - |   |
| Total non-performing loans                              |   |                   | 61,667 |   |                |   | 49,968 |             |   |   | 64,463 |   |
| Other real estate owned                                 |   |                   | 21,218 |   |                |   | 21,860 |             |   |   | 20,025 |   |
| Other repossessed assets                                |   |                   | 1,485  |   |                |   | 420    |             |   |   | 403 |   |
| Total non-performing assets                             |   | $                      | 84,370 |   |                | $      | 72,248 |             |   | $ | 84,891 |   |
| Restructured loans, still accruing interest             |   |                   | 7,081  |   |                |   | 5,588  |             |   |   | 2,990 |   |
| Total non-performing loans to total loans               |   |                   | 5.19   | %      |                |   | 4.19   | %                |   |   | 5.27 | % |
| Allowance for loan losses to non-performing loans       |   |                   | 46.03  | %      |                |   | 57.48  | %                |   |   | 38.51 | % |
| Total non-performing assets to total assets             |   |                   | 5.54   | %      |                |   | 4.62   | %                |   |   | 5.30 | % |

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Critical Accounting Policies –Allowance for Loan Losses
Results of Operations—Income Statement Analysis

|                                         |   | Three Months Ended March 31, |      |
|----------------------------------------------|--------|------------------------------|-----------|
|                                         |   | 2011                         |      |   | 2010 |   |
|                                         |   | (Dollars in thousands)       |      |
| Balance at beginning of period               |   | $                            | 28,722    |   |   | $ | 24,504 |   |
| Provision for loan losses                    |   |                         | 1,450     |   |   |   | 4,257 |   |
| Total charge-offs                            |   |                         | (2,022    | ) |   |   | (4,059 | ) |
| Total recoveries                             |   |                         | 234       |   |   |   | 120 |   |
| Net charge-offs                              |   |                         | (1,788    | ) |   |   | (3,939 | ) |
| Balance at end of period                     |   | $                            | 28,384    |   |   | $ | 24,822 |   |
|                                         |   |                         |      |   |   |   |   |   |
| Gross loans at end of period                 |   | $                            | 1,185,904 |   |   | $ | 1,221,520 |   |
| Ratio of allowance to total loans            |   |                         | 2.39      | % |   |   | 2.03 | % |
| Ratio of net charge-offs to average loans(1) |   |                         | 0.61      | % |   |   | 1.29 | % |

| (1) | Net charge-offs are annualized for the purposes of this calculation. |
|-----|----------------------------------------------------------------------|

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Critical Accounting Policies –Allowance for Loan Losses
Results of Operations—Income Statement Analysis

|                                   |   | At March 31, 2011      |   |    | At December 31, 2010 |   |      | At March 31, 2010 |   |
|----------------------------------------|--------|------------------------|--------|---------|----------------------|--------|-----------|-------------------|--------|
|                                   |   | Amount                 |   |    | Percent              |   |      | Amount            |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                   |   | (Dollars in thousands) |   |
| Commercial                             |   | $                      | 5,609  |    |                 |   | 12.25     | %                 |   | $ | 5,857 |   |   |   | 12.58 | % |   | $ | 6,047 |   |   |   | 11.04 | % |
| Commercial and residential real estate |   |                   | 12,125 |    |                 |   | 69.42     |              |   |   | 11,102 |   |   |   | 69.27 |   |   |   | 8,790 |   |   |   | 69.88 |   |
| Construction real estate               |   |                   | 6,727  |    |                 |   | 14.21     |              |   |   | 7,322 |   |   |   | 13.82 |   |   |   | 6,695 |   |   |   | 14.76 |   |
| Installment and other                  |   |                   | 4,058  |    |                 |   | 4.12      |              |   |   | 4,122 |   |   |   | 4.33 |   |   |   | 3,290 |   |   |   | 4.32 |   |
| Unallocated                            |   |                   | (135   | )  |                 |   | N/A  |              |   |   | 319 |   |   |   | N/A  |   |   |   | - |   |   |   | N/A  |   |
| Total                                  |   | $                      | 28,384 |    |                 |   | 100.00    | %                 |   | $ | 28,722 |   |   |   | 100.00 | % |   | $ | 24,822 |   |   |   | 100.00 | % |

Critical Accounting Policies—Allowance for Loan Losses

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|                                        |   | AtMarch 31, 2011 |   | AtDecember 31, 2010 |   | AtMarch 31, 2010 |   |
|---------------------------------------------|--------|------------------|--------|---------------------|--------|------------------|--------|
|                                        |   | (In thousands)   |   |
| Performing loans classified as:             |   |
| Substandard                                 |   | $                | 16,433 |                |   | $                | 25,667 |   |   | $ | 28,883 |   |
| Doubtful                                    |   |             | -      |                |   |             | -      |   |   |   | - |   |
| Total performing adversely classified loans |   | $                | 16,433 |                |   | $                | 25,667 |   |   | $ | 28,883 |   |
| Special mention loans                       |   | $                | 1,641  |                |   | $                | 1,091  |   |   | $ | 2,744 |   |

Liquidity and Sources of Capital

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Item3. Quantitative and Qualitative Disclosures About Market Risk

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|                                                   |   | Time to Maturity or Repricing |    |
|--------------------------------------------------------|--------|-------------------------------|---------|
| As of March 31, 2011:                                  |   | 0-90 Days                     |    |   | 91-365 Days |   |   | 1-5 Years |   |   | Over 5 Years |   |   | Total |   |
|                                                   |   | (Dollars in thousands)        |    |
| Interest-earning Assets:                               |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                  |   | $                             | 445,184 |   |   | $ | 428,573 |   |   | $ | 254,237 |   |   | $ | 57,910 |   |   | $ | 1,185,904 |   |
| Loans held for sale                                    |   |                          | 5,174   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,174 |   |
| Investment securities                                  |   |                          | 11,998  |   |   |   | 29,798 |   |   |   | 47,494 |   |   |   | 64,566 |   |   |   | 153,856 |   |
| Securities purchased under agreements to resell        |   |                          | 393     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 393 |   |
| Interest-bearing deposits with banks                   |   |                          | 101,062 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 101,062 |   |
| Investment in unconsolidated trusts                    |   |                          | 186     |   |   |   | - |   |   |   | - |   |   |   | 930 |   |   |   | 1,116 |   |
| Total interest-earning assets                          |   | $                             | 563,997 |   |   | $ | 458,371 |   |   | $ | 301,731 |   |   | $ | 123,406 |   |   | $ | 1,447,505 |   |
|                                                   |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing Liabilities:                          |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW deposits                                           |   | $                             | 58,474  |   |   | $ | 112,092 |   |   | $ | - |   |   | $ | - |   |   | $ | 170,566 |   |
| Money market deposits                                  |   |                          | 85,208  |   |   |   | 125,409 |   |   |   | - |   |   |   | - |   |   |   | 210,617 |   |
| Savings deposits                                       |   |                          | 131,045 |   |   |   | 187,866 |   |   |   | - |   |   |   | - |   |   |   | 318,911 |   |
| Time deposits over $100,000                            |   |                          | 88,620  |   |   |   | 155,961 |   |   |   | 40,033 |   |   |   | 11,423 |   |   |   | 296,037 |   |
| Time deposits under $100,000                           |   |                          | 53,191  |   |   |   | 126,092 |   |   |   | 25,086 |   |   |   | 1,899 |   |   |   | 206,268 |   |
| Short-term borrowings                                  |   |                          | -       |   |   |   | 10,000 |   |   |   | - |   |   |   | - |   |   |   | 10,000 |   |
| Long-term borrowings                                   |   |                          | -       |   |   |   | - |   |   |   | 20,000 |   |   |   | 2,300 |   |   |   | 22,300 |   |
| Capital lease obligations                              |   |                          | -       |   |   |   | - |   |   |   | 2,211 |   |   |   | - |   |   |   | 2,211 |   |
| Junior subordinated debt owed to unconsolidated trusts |   |                          | 6,186   |   |   |   | - |   |   |   | - |   |   |   | 30,930 |   |   |   | 37,116 |   |
| Total interest-bearing liabilities                     |   | $                             | 422,724 |   |   | $ | 717,420 |   |   | $ | 87,330 |   |   | $ | 46,552 |   |   | $ | 1,274,026 |   |
|                                                   |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rate sensitive assets (RSA)                            |   | $                             | 563,997 |   |   | $ | 1,022,368 |   |   | $ | 1,324,099 |   |   | $ | 1,447,505 |   |   |   | 1,447,505 |   |
| Rate sensitive liabilities (RSL)                       |   |                          | 422,724 |   |   |   | 1,140,144 |   |   |   | 1,227,474 |   |   |   | 1,274,026 |   |   |   | 1,274,026 |   |
| Cumulative GAP (GAP=RSA-RSL)                           |   |                          | 141,273 |   |   |   | (117,776 | ) |   |   | 96,625 |   |   |   | 173,479 |   |   |   | 173,479 |   |
| RSA/Total assets                                       |   |                          | 37.03   | % |   |   | 67.13 | % |   |   | 86.94 | % |   |   | 95.05 | % |   |   | 95.05 | % |
| RSL/Total assets                                       |   |                          | 27.76   | % |   |   | 74.86 | % |   |   | 80.60 | % |   |   | 83.66 | % |   |   | 83.66 | % |
| GAP/Total assets                                       |   |                          | 9.28    | % |   |   | -7.73 | % |   |   | 6.34 | % |   |   | 11.39 | % |   |   | 11.39 | % |
| GAP/RSA                                                |   |                          | 25.05   | % |   |   | -11.52 | % |   |   | 7.30 | % |   |   | 11.98 | % |   |   | 11.98 | % |

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|                                |   |          | At March 31, 2011 |           | At December 31, 2010 |          |
|-------------------------------------|--------|---------------|-------------------|----------------|----------------------|---------------|
| Changes in Levels of Interest Rates |   | Dollar Change |              | Percent Change |                 | Dollar Change |   | Percent Change |   |
| (Dollars in thousands)              |   |
|                                | +2.00  | %             |              | $              | (6,705               | )             |   |   | (12.61 | )% |   | $ | (5,253 | ) |   |   | (9.95 | )% |
|                                | +1.00  |          |              |           | (5,456               | )             |   |   | (10.26 | ) |   |   | (3,363 | ) |   |   | (6.37 | ) |
|                                | (1.00  | )             |              |           | (1,675               | )             |   |   | (3.15 | ) |   |   | (1,711 | ) |   |   | (3.24 | ) |
|                                | (2.00  | )             |              |           | (3,446               | )             |   |   | (6.48 | ) |   |   | (3,426 | ) |   |   | (6.49 | ) |

| 1. | Changes in interest rates are immediate. |
|----|------------------------------------------|

| 2. | It is our policy that interest rate exposure due to a 2% interest rate rise or fall be limited to 15% of our annual net interest income, as forecasted by the simulation model.  As demonstrated by the table above, our interest rate risk exposure was within this policy at March 31, 2011. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 4. Controls and Procedures.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Item 4. [Removed and Reserved]

Item 5. Other Information

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Item 6. Exhibits

| 31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
|------|-------------------------------------------------------------------------------|

| 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
|------|-------------------------------------------------------------------------------|

| 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

SIGNATURES

|               | TRINITY CAPITAL CORPORATION |
|--------------------|-----------------------------|
|               |                        |
| Date: May 10, 2011 | By:                         | /s/ WILLIAM C. ENLOE |
|               |                        | William C. Enloe |
|               |                        | President and Chief Executive Officer |
|               |                        |   |
| Date: May 10, 2011 | By:                         | /s/ DANIEL R. BARTHOLOMEW |
|               |                        | Daniel R. Bartholomew |
|               |                        | Chief Financial Officer |

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